California
|
|
94-2424084
|
(State or other
jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
400 Kato
Terrace
Fremont,
CA
|
|
94539
|
(Address of
principal executive offices)
|
|
(Zip
Code)
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Large accelerated
filer ☐
|
Accelerated filer
☐
|
Non-accelerated
filer ☒
|
Smaller reporting
company ☒
|
|
Emerging growth
company ☐
|
Title
of each class
|
Trading
Symbol(s)
|
Name
of each exchange on which registered
|
Common
Stock
|
AEHR
|
The
NASDAQ Capital Market
|
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|
November 30,
|
May 31,
|
|
2019
|
2019
|
|
(1)
|
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash
and cash equivalents
|
$5,302
|
$5,428
|
Accounts
receivable, net
|
5,231
|
4,859
|
Inventories
|
9,800
|
9,061
|
Prepaid
expenses and other current assets
|
534
|
686
|
|
|
|
Total
current assets
|
20,867
|
20,034
|
|
|
|
Property
and equipment, net
|
860
|
1,045
|
Operating
lease right-of-use assets
|
2,387
|
--
|
Other
assets
|
186
|
228
|
|
|
|
Total
assets
|
$24,300
|
$21,307
|
|
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$2,320
|
$1,933
|
Accrued
expenses
|
1,596
|
2,034
|
Operating
lease liabilities, short-term
|
619
|
--
|
Customer
deposits and deferred revenue, short-term
|
1,809
|
1,545
|
|
|
|
Total current liabilities
|
6,344
|
5,512
|
|
|
|
Operating
lease liabilities, long-term
|
1,924
|
--
|
Deferred
rent
|
--
|
153
|
Deferred
revenue, long-term
|
64
|
189
|
|
|
|
Total
liabilities
|
8,332
|
5,854
|
|
|
|
Aehr
Test Systems shareholders' equity:
|
|
|
Common
stock, $0.01 par value:
Authorized:
75,000 shares;
|
|
|
Issued and outstanding: 22,914 shares and 22,669 shares at
November 30, 2019 and May 31, 2019,
respectively
|
229
|
227
|
Additional
paid-in capital
|
85,194
|
84,499
|
Accumulated
other comprehensive income
|
2,211
|
2,230
|
Accumulated
deficit
|
(71,646)
|
(71,484)
|
|
|
|
Total
Aehr Test Systems shareholders' equity
|
15,988
|
15,472
|
Noncontrolling
interest
|
(20)
|
(19)
|
|
|
|
Total
shareholders' equity
|
15,968
|
15,453
|
|
|
|
Total
liabilities and shareholders' equity
|
$24,300
|
$21,307
|
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
$6,874
|
$5,911
|
$12,407
|
$10,651
|
Cost
of sales
|
3,672
|
3,513
|
6,934
|
6,700
|
Gross
profit
|
3,202
|
2,398
|
5,473
|
3,951
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
general and administrative
|
2,157
|
1,977
|
3,965
|
3,856
|
Research
and development
|
795
|
986
|
1,687
|
2,102
|
Total
operating expenses
|
2,952
|
2,963
|
5,652
|
5,958
|
|
|
|
|
|
Income
(loss) from operations
|
250
|
(565)
|
(179)
|
(2,007)
|
|
|
|
|
|
Interest
income (expense), net
|
2
|
(74)
|
14
|
(152)
|
Other
income, net
|
5
|
29
|
15
|
38
|
|
|
|
|
|
Income
(loss) before income tax expense
|
257
|
(610)
|
(150)
|
(2,121)
|
|
|
|
|
|
Income
tax expense
|
(6)
|
(19)
|
(12)
|
(23)
|
Net
income (loss)
|
251
|
(629)
|
(162)
|
(2,144)
|
Less:
Net income attributable to the noncontrolling interest
|
--
|
--
|
--
|
--
|
|
|
|
|
|
Net income (loss)
attributable to Aehr Test Systems common shareholders
|
$251
|
$(629)
|
$(162)
|
$(2,144)
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) per share
|
|
|
|
|
Basic
|
$0.01
|
$(0.03)
|
$(0.01)
|
$(0.10)
|
Diluted
|
$0.01
|
$(0.03)
|
$(0.01)
|
$(0.10)
|
|
|
|
|
|
Shares
used in per share calculations:
|
|
|
|
|
Basic
|
22,823
|
22,294
|
22,765
|
22,242
|
Diluted
|
22,912
|
22,294
|
22,765
|
22,242
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Net income
(loss)
|
$251
|
$(629)
|
$(162)
|
$(2,144)
|
|
|
|
|
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
Net
change in cumulative translation, adjustments
|
(5)
|
(34)
|
(20)
|
(49)
|
|
|
|
|
|
Total comprehensive
income (loss)
|
246
|
(663)
|
(182))
|
(2,193)
|
Less: Comprehensive
income attributable to the noncontrolling interest
|
--
|
1
|
(1)
|
2
|
|
|
|
|
|
Comprehensive
income (loss), attributable to Aehr
Test Systems common shareholders
|
$246
|
$(664)
|
$(181)
|
$(2,195)
|
|
|
|
|
|
Total
Aehr
|
|
|
|
|
|
|
Accumulated
|
|
Test
|
|
|
|
|
|
Additional
|
Other
|
|
Systems
|
|
Total
|
|
|
Common
Stock
|
Paid-in
|
Comprehensive
|
Accumulated
|
Shareholders’
|
Noncontrolling
|
Shareholders'
|
|
Three Months Ended November 30, 2019 |
Shares
|
Amount
|
Capital
|
Income
|
Deficit
|
Equity
|
Interest
|
Equity
|
Balances,
August 31, 2019
|
22,721
|
$227
|
$84,760
|
$2,216
|
$(71,897)
|
$15,306
|
$(20)
|
$15,286
|
|
|
|
|
|
|
|
|
|
Issuance of common stock under employee plans
|
193
|
2
|
229
|
--
|
--
|
231
|
--
|
231
|
Stock-based
compensation
|
--
|
--
|
205
|
--
|
--
|
205
|
--
|
205
|
Net
loss
|
--
|
--
|
--
|
--
|
251
|
251
|
--
|
251
|
Foreign currency translation adjustment
|
--
|
--
|
--
|
(5)
|
--
|
(5)
|
--
|
(5)
|
|
|
|
|
|
|
|
|
|
Balances,
November 30, 2019
|
22,914
|
$229
|
$85,194
|
$2,211
|
$(71,646)
|
$15,988
|
$(20)
|
$15,968
|
|
|
|
|
|
Total
Aehr
|
|
|
|
|
|
|
Accumulated
|
|
Test
|
|
|
|
|
|
Additional
|
Other
|
|
Systems
|
|
Total
|
|
|
Common
Stock
|
Paid-in
|
Comprehensive
|
Accumulated
|
Shareholders’
|
Noncontrolling
|
Shareholders'
|
|
Six
Months Ended November 30, 2019
|
Shares
|
Amount
|
Capital
|
Income
|
Deficit
|
Equity
|
Interest
|
Equity
|
Balances,
May 31, 2019
|
22,669
|
$227
|
$84,499
|
$2,230
|
$(71,484)
|
$15,472
|
$(19)
|
$15,453
|
|
|
|
|
|
|
|
|
|
Issuance of common stock under employee plans
|
245
|
2
|
291
|
--
|
--
|
293
|
--
|
293
|
Stock-based
compensation
|
--
|
--
|
404
|
--
|
--
|
404
|
--
|
404
|
Net
loss
|
--
|
--
|
--
|
--
|
(162)
|
(162)
|
--
|
(162)
|
Foreign currency translation adjustment
|
--
|
--
|
--
|
(19)
|
--
|
(19)
|
(1)
|
(20)
|
|
|
|
|
|
|
|
|
|
Balances,
November 30, 2019
|
22,914
|
$229
|
$85,194
|
$2,211
|
$(71,646)
|
$15,988
|
$(20)
|
$15,968
|
|
|
|
|
|
Total
Aehr
|
|
|
|
|
|
|
Accumulated
|
|
Test
|
|
|
|
|
|
Additional
|
Other
|
|
Systems
|
|
Total
|
|
|
Common
Stock
|
Paid-in
|
Comprehensive
|
Accumulated
|
Shareholders’
|
Noncontrolling
|
Shareholders'
|
|
Three Months Ended November 30, 2018
|
Shares
|
Amount
|
Capital
|
Income
|
Deficit
|
Equity
|
Interest
|
Equity
|
Balances,
August 31, 2018
|
22,245
|
$222
|
$83,405
|
$2,276
|
$(67,764)
|
$18,139
|
$(19)
|
$18,120
|
|
|
|
|
|
|
|
|
|
Issuance of common stock under employee plans
|
111
|
2
|
201
|
--
|
--
|
203
|
--
|
203
|
Stock-based
compensation
|
--
|
--
|
224
|
--
|
--
|
224
|
--
|
224
|
Net
income
|
--
|
--
|
--
|
--
|
(629)
|
(629)
|
--
|
(629)
|
Foreign currency translation adjustment
|
--
|
--
|
--
|
(35)
|
--
|
(35)
|
1
|
(34)
|
|
|
|
|
|
|
|
|
|
Balances,
November 30, 2018
|
22,356
|
$224
|
$83,830
|
$2,241
|
$(68,393)
|
$17,902
|
$(18)
|
$17,884
|
|
|
|
|
|
Total
Aehr
|
|
|
|
|
|
|
Accumulated
|
|
Test
|
|
|
|
|
|
Additional
|
Other
|
|
Systems
|
|
Total
|
|
|
Common
Stock
|
Paid-in
|
Comprehensive
|
Accumulated
|
Shareholders’
|
Noncontrolling
|
Shareholders'
|
|
Six
Months Ended November 30, 2018
|
Shares
|
Amount
|
Capital
|
Income
|
Deficit
|
Equity
|
Interest
|
Equity
|
Balances,
May 31, 2018
|
22,143
|
$221
|
$83,041
|
$2,292
|
$(66,249)
|
$19,305
|
$(20)
|
$19,285
|
|
|
|
|
|
|
|
|
|
Issuance of common stock under employee plans
|
213
|
3
|
309
|
--
|
--
|
312
|
--
|
312
|
Stock-based
compensation
|
--
|
--
|
480
|
--
|
--
|
480
|
--
|
480
|
Net
income
|
--
|
--
|
--
|
--
|
(2,144)
|
(2,144)
|
--
|
(2,144)
|
Foreign currency translation adjustment
|
--
|
--
|
--
|
(51)
|
--
|
(51)
|
2
|
(49)
|
|
|
|
|
|
|
|
|
|
Balances,
November 30, 2018
|
22,356
|
$224
|
$83,830
|
$2,241
|
$(68,393)
|
$17,902
|
$(18)
|
$17,884
|
|
Six Months
Ended
|
|
|
November
30,
|
|
|
2019
|
2018
|
Cash
flows from operating activities:
|
|
|
Net
loss
|
$(162)
|
$(2,144)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
Stock-based
compensation expense
|
404
|
480
|
Recovery
of doubtful accounts
|
--
|
(3)
|
Depreciation
and amortization
|
193
|
230
|
Changes
in operating assets and liabilities:
|
|
|
Accounts
receivable
|
(372)
|
(1,068)
|
Inventories
|
(627)
|
(935)
|
Prepaid
expenses and other assets
|
194
|
23
|
Accounts
payable
|
389
|
302
|
Accrued expenses
|
(438)
|
(175)
|
Customer
deposits and deferred revenue
|
139
|
231
|
Deferred
rent
|
--
|
84
|
Income
taxes payable
|
4
|
18
|
Net
cash used in operating activities
|
(276)
|
(2,957)
|
|
|
|
Cash
flows from investing activities:
|
|
|
Purchases
of property and equipment
|
(123)
|
(103)
|
Net
cash used in investing activities
|
(123)
|
(103)
|
|
|
|
Cash
flows from financing activities:
|
|
|
Proceeds from issuance of common
stock under employee plans, net of taxes paid related to
share settlement of equity awards
|
293
|
312
|
Net cash provided by financing activities
|
293
|
312
|
|
|
|
Effect
of exchange rates on cash and cash equivalents
|
(20)
|
(98)
|
|
|
|
Net
decrease in cash, cash equivalents
and restricted
cash
|
(126)
|
(2,846)
|
|
|
|
Cash,
cash equivalents and restricted cash, beginning of
period
|
5,508
|
16,848
|
|
|
|
Cash,
cash equivalents and restricted cash, end of period
|
$5,382
|
$14,002
|
|
|
|
Supplemental
disclosure of non-cash flow information:
|
|
|
Transfers
of property and equipment to inventories
|
$112
|
$--
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Type
of good / service:
|
|
|
|
|
Systems
|
$3,027
|
$3,712
|
$5,961
|
$5,518
|
Contactors
|
3,046
|
943
|
4,696
|
2,096
|
Services
|
801
|
1,256
|
1,750
|
3,037
|
|
$6,874
|
$5,911
|
$12,407
|
$10,651
|
|
|
|
|
|
Product
lines:
|
|
|
|
|
Wafer-level
|
$6,335
|
$4,226
|
$11,161
|
$6,195
|
Test
During Burn-In
|
539
|
1,685
|
1,246
|
4,456
|
|
$6,874
|
$5,911
|
$12,407
|
$10,651
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Geographic
region:
|
|
|
|
|
United
States
|
$2,627
|
$4,509
|
$7,684
|
$7,204
|
Asia
|
3,529
|
1,334
|
3,867
|
3,068
|
Europe
|
718
|
68
|
856
|
379
|
|
$6,874
|
$5,911
|
$12,407
|
$10,651
|
|
|
|
|
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Timing
of revenue recognition:
|
|
|
|
|
Products and services transferred at a point in
time
|
$6,322
|
$5,272
|
$11,181
|
$9,390
|
Services
transferred over time
|
552
|
639
|
1,226
|
1,261
|
|
$6,874
|
$5,911
|
$12,407
|
$10,651
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Numerator:
Net income (loss)
|
$251
|
$(629)
|
$(162)
|
$(2,144)
|
|
|
|
|
|
Denominator
for basic net income (loss) per
share:
|
|
|
|
|
Weighted
average shares outstanding
|
22,823
|
22,294
|
22,765
|
22,242
|
|
|
|
|
|
Shares
used in basic net income (loss) per
share calculation
|
22,823
|
22,294
|
22,765
|
22,242
|
Effect
of dilutive securities
|
89
|
--
|
--
|
--
|
|
|
|
|
|
Denominator
for diluted net income (loss) per
share
|
22,912
|
22,294
|
22,765
|
22,242
|
|
|
|
|
|
Basic
net income (loss) per share
|
$0.01
|
$(0.03)
|
$(0.01)
|
$(0.10)
|
Diluted
net income (loss) per share
|
$0.01
|
$(0.03)
|
$(0.01)
|
$(0.10)
|
|
Balance as of
|
|
|
|
|
November 30, 2019
|
Level 1
|
Level 2
|
Level 3
|
Money
market funds
|
$1,838
|
$1,838
|
$--
|
$--
|
Assets
|
$1,838
|
$1,838
|
$--
|
$--
|
|
Balance as of
May 31, 2019
|
Level 1
|
Level 2
|
Level 3
|
Money
market funds
|
$3,017
|
$3,017
|
$--
|
$--
|
Assets
|
$3,017
|
$3,017
|
$--
|
$--
|
|
November 30,
|
May 31,
|
|
2019
|
2019
|
Raw
materials and sub-assemblies
|
$6,562
|
$5,471
|
Work
in process
|
3,053
|
3,580
|
Finished
goods
|
185
|
10
|
|
$9,800
|
$9,061
|
|
Three
Months Ended
|
Six
Months Ended
|
||
|
November
30,
|
November
30,
|
||
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Balance
at the beginning of the period
|
$192
|
$160
|
$154
|
$135
|
|
|
|
|
|
Accruals for warranties issued during the
period
|
79
|
71
|
141
|
146
|
Consumption
of reserves
|
(81)
|
(68)
|
(105)
|
(118)
|
|
|
|
|
|
Balance
at the end of the period
|
$190
|
$163
|
$190
|
$163
|
|
November 30,
|
May 31,
|
|
2019
|
2019
|
Customer
deposits
|
$1,458
|
$1,003
|
Deferred
revenue
|
351
|
542
|
|
$1,809
|
$1,545
|
|
Three Months Ended
November 30, 2019
|
Six Months Ended
November 30, 2019
|
Cash
paid for amounts included in the measurement of operating lease
liabilities
|
|
|
Operating
cash flows from operating leases
|
$184
|
$366
|
Fiscal year
|
Operating Leases
|
2020
(excluding the first six months of 2020)
|
$366
|
2021
|
754
|
2022
|
772
|
2023
|
795
|
2024
|
132
|
Thereafter
|
--
|
Total
future minimum operating lease payments
|
$2,819
|
Less:
imputed interest
|
276
|
Present
value of operating lease liabilities
|
$2,543
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
Stock-based
compensation in the form of employee stock options, RSUs and ESPP
purchase rights, included in:
|
|
|
|
|
Cost
of sales
|
$19
|
$23
|
$39
|
$59
|
Selling,
general and administrative
|
135
|
136
|
264
|
284
|
Research
and development
|
51
|
65
|
101
|
137
|
Total
stock-based compensation
|
$205
|
$224
|
$404
|
$480
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
Expected
term (in years)
|
5
|
5
|
5
|
5
|
Volatility
|
0.72
|
0.70
|
0.71
|
0.72
|
Risk-free
interest rate
|
1.60%
|
3.01%
|
1.85%
|
2.84%
|
Weighted
average grant date fair value
|
$1.05
|
$1.21
|
$0.98
|
$1.38
|
|
Three and Six Months Ended
|
|
November 30, 2019
|
|
|
Expected
term (in years)
|
0.5-2.0
|
Volatility
|
0.62-0.71
|
Expected
dividend
|
$0.00
|
Risk-free
interest rates
|
1.56% - 1.81%
|
Estimated
forfeiture rate
|
0%
|
Weighted
average grant date fair value
|
$0.80
|
|
Available
|
|
Shares
|
Balance,
May 31, 2019
|
1,147
|
|
|
Options
granted
|
(527)
|
Options
cancelled
|
151
|
Options
expired
|
(119)
|
|
|
Balance,
August 31, 2019
|
652
|
Options
reserved
|
1,196
|
Options
granted
|
(58)
|
Options
cancelled
|
280
|
Options
expired
|
(256)
|
|
|
Balance,
November 30, 2019
|
1,814
|
|
Outstanding
Options
|
||
|
|
Weighted
|
|
|
Number
|
Average
|
Aggregate
|
|
of
|
Exercise
|
Intrinsic
|
|
Shares
|
Price
|
Value
|
Balances,
May 31, 2019
|
3,107
|
$2.20
|
$282
|
|
|
|
|
Options
granted
|
527
|
$1.64
|
|
Options
cancelled
|
(151)
|
$1.50
|
|
Options
exercised
|
(49)
|
$1.27
|
|
|
|
|
|
Balances,
August 31, 2019
|
3,434
|
$2.16
|
$41
|
|
|
|
|
Options
granted
|
58
|
$1.77
|
|
Options
cancelled
|
(280)
|
$2.19
|
|
Options
exercised
|
(85)
|
$1.06
|
|
|
|
|
|
Balances,
November 30, 2019
|
3,127
|
$2.18
|
$358
|
|
|
|
|
Options fully vested and expected to vest at November 30,
2019
|
3,091
|
$2.18
|
$354
|
|
Options
Outstanding
|
Options
Exercisable
|
|||||
|
at November 30,
2019
|
at November 30,
2019
|
|||||
Range
of Exercise
Prices
|
Number
Outstanding Shares
|
Weighted Average
Remaining Contractual Life (Years)
|
Weighted Average
Exercise Price
|
Number
Exercisable Shares
|
Weighted Average
Remaining Contractual Life (Years)
|
Weighted Average
Exercise Price
|
Aggregate
Intrinsic Value
|
$1.09-$1.28
|
260
|
0.57
|
$1.28
|
260
|
0.57
|
$1.28
|
|
$1.64-$2.06
|
1,199
|
5.53
|
$1.76
|
447
|
4.22
|
$1.81
|
|
$2.10-$2.81
|
1,439
|
3.13
|
$2.43
|
1,146
|
2.48
|
$2.43
|
|
$3.46-$3.93
|
229
|
4.66
|
$3.85
|
151
|
4.69
|
$3.80
|
|
$1.09-$3.93
|
3,127
|
3.95
|
$2.18
|
2,004
|
2.79
|
$2.25
|
$219
|
|
November 30,
|
May 31,
|
|
2019
|
2019
|
United
States
|
$821
|
$1,005
|
Asia
|
39
|
40
|
Europe
|
--
|
--
|
|
$860
|
$1,045
|
|
Three Months Ended
|
Six Months Ended
|
||
|
November 30,
|
November 30,
|
||
|
2019
|
2018
|
2019
|
2018
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
100.0%
|
100.0%
|
100.0%
|
100.0%
|
Cost
of sales
|
53.4
|
59.4
|
55.9
|
62.9
|
Gross
profit
|
46.6
|
40.6
|
44.1
|
37.1
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Selling,
general and administrative
|
31.4
|
33.5
|
31.9
|
36.2
|
Research
and development
|
11.6
|
16.7
|
13.6
|
19.7
|
|
|
|
|
|
Total
operating expenses
|
43.0
|
50.2
|
45.5
|
55.9
|
|
|
|
|
|
Income (loss) from operations
|
3.6
|
(9.6)
|
(1.4)
|
(18.8)
|
|
|
|
|
|
Interest
income (expense), net
|
--
|
(1.3)
|
0.1
|
(1.4)
|
Other
income, net
|
0.1
|
0.6
|
0.1
|
0.3
|
|
|
|
|
|
Income
(loss) before income tax expense
|
3.7
|
(10.3)
|
(1.2)
|
(19.9)
|
|
|
|
|
|
Income
tax expense
|
--
|
(0.3)
|
(0.1)
|
(0.2)
|
Net
income (loss)
|
3.7
|
(10.6)
|
(1.3)
|
(20.1)
|
Less:
Net income attributable to the noncontrolling interest
|
--
|
--
|
--
|
--
|
|
|
|
|
|
Net
income (loss) attributable to Aehr Test Systems common
shareholders
|
3.7%
|
(10.6)%
|
(1.3)%
|
(20.1)%
|
Exhibit No.
|
|
Description
|
|
|
|
|
Certification
of Chief Executive Officer pursuant to Rules 13a-14(a) and
15d-14(a) promulgated under the Securities Exchange Act of 1934, as
amended, as adopted pursuant to Section 302(a) of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification
of Chief Financial Officer pursuant to Rules 13a-14(a) and
15d-14(a) promulgated under the Securities Exchange Act of 1934, as
amended, as adopted pursuant to Section 302(a) of the
Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
|
|
|
|
|
101.INS
|
|
XBRL
Instance Document
|
|
|
|
101.SCH
|
|
XBRL
Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL
Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL
Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL
Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL
Taxonomy Extension Presentation Linkbase Document
|
|
Aehr
Test Systems
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date:
January 14, 2020
|
By:
|
/s/
GAYN ERICKSON
|
|
|
|
Gayn
Erickson
|
|
|
|
President
and Chief Executive Officer
|
|
|
|
|
|
Date:
January 14, 2020
|
By:
|
/s/
KENNETH B. SPINK
|
|
|
|
Kenneth
B. Spink
|
|
|
|
Vice
President of Finance and Chief Financial Officer
|
|
|
|
|
|
Date: January 14,
2020
|
|
|
|
|
|
/s/ GAYN
ERICKSON
|
|
|
|
Gayn
Erickson
|
|
|
|
President and Chief
Executive Officer
|
|
|
|
|
|
Date: January 14,
2020
|
|
|
|
|
|
/s/ KENNETH B.
SPINK
|
|
|
|
Kenneth B.
Spink
|
|
|
|
Vice President of
Finance and Chief Financial Officer
|
|
|
|
|
|
Date: January 14,
2020
|
|
|
|
|
|
/s/ GAYN
ERICKSON
|
|
|
|
Gayn
Erickson
|
|
|
|
President and Chief
Executive Officer
|
|
|
|
|
|
Date: January 14,
2020
|
|
|
|
|
|
/s/ KENNETH B.
SPINK
|
|
|
|
Kenneth B.
Spink
|
|
|
|
Vice President of
Finance and Chief Financial Officer
|
|
4. EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2019 |
Nov. 30, 2018 |
Nov. 30, 2019 |
Nov. 30, 2018 |
|
Earnings Per Share [Abstract] | ||||
Numerator: Net income (loss) | $ 251 | $ (629) | $ (162) | $ (2,144) |
Denominator for basic net income (loss) per share: Weighted average shares outstanding (in thousands) | 22,823 | 22,294 | 22,765 | 22,242 |
Shares used in basic net income (loss) per share calculation (in thousands) | 22,823 | 22,294 | 22,765 | 22,242 |
Effect of dilutive securities (in thousands) | 89 | 0 | 0 | 0 |
Denominator for diluted net income (loss) per share (in thousands) | 22,912 | 22,294 | 22,765 | 22,242 |
Basic net income (loss) per share | $ 0.01 | $ (0.03) | $ (0.01) | $ (0.10) |
Diluted net income (loss) per share | $ 0.01 | $ (0.03) | $ (0.01) | $ (0.10) |
3. REVENUE (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2019 |
Nov. 30, 2018 |
Nov. 30, 2019 |
Nov. 30, 2018 |
|
Net sales | $ 6,874 | $ 5,911 | $ 12,407 | $ 10,651 |
Systems | ||||
Net sales | 3,027 | 3,712 | 5,961 | 5,518 |
Contactors | ||||
Net sales | 3,046 | 943 | 4,696 | 2,096 |
Services | ||||
Net sales | 801 | 1,256 | 1,750 | 3,037 |
Wafer-level | ||||
Net sales | 6,335 | 4,226 | 11,161 | 6,195 |
Test During Burn-In | ||||
Net sales | $ 539 | $ 1,685 | $ 1,246 | $ 4,456 |
4. EARNINGS PER SHARE |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4. EARNINGS PER SHARE | 4. EARNINGS PER SHARE
Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, RSUs and ESPP shares) outstanding during the period using the treasury stock method.
The following table presents the computation of basic and diluted net (loss) income per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data):
For the purpose of computing diluted earnings per share, the weighted average number of potential common shares does not include stock options with an exercise price greater than the average fair value of the Company’s common stock for the period, as the effect would be antidilutive. Stock options to purchase 2,919,000 shares of common stock were outstanding as of November 30, 2019, but were not included in the computation of diluted net income per share, because the inclusion of such shares would be antidilutive. In the three months ended November 30, 2018 and six months ended November 30, 2019 and 2018, potential common shares were not included in the calculation of diluted net loss per share as the effect would be antidilutive. As such, the numerator and the denominator used in computing both basic and diluted net loss per share for these periods are the same. Stock options to purchase 3,373,000 shares of common stock, RSUs for 38,000 shares and ESPP rights to purchase 327,000 ESPP shares were outstanding as of November 30, 2018, but were not included in the computation of diluted net loss per share because the inclusion of such shares would be antidilutive. The 2,657,000 shares convertible under the 9% Convertible Secured Notes (the “Convertible Notes”) outstanding at November 30, 2018 were not included in the computation of diluted net loss per share because the inclusion of such shares would be antidilutive.
|
8. PRODUCT WARRANTIES |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranties Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8. PRODUCT WARRANTIES | 8. PRODUCT WARRANTIES
The Company provides for the estimated cost of product warranties at the time revenues are recognized on the products shipped. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates, revisions to the estimated warranty liability would be required.
The standard warranty period is one year for systems and ninety days for parts and service.
The following is a summary of changes in the Company's liability for product warranties during the three and six months ended November 30, 2019 and 2018 (in thousands):
The accrued warranty balance is included in accrued expenses on the accompanying condensed consolidated balance sheets.
|
12. STOCK-BASED COMPENSATION |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12. STOCK-BASED COMPENSATION | 12. STOCK-BASED COMPENSATION
Stock-based compensation expense consists of expenses for stock options, restricted stock units, or RSUs, and employee stock purchase plan, or ESPP, purchase rights. Stock-based compensation expense for stock options and ESPP purchase rights is measured at each grant date, based on the fair value of the award using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service period. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable. The Company’s employee stock options have characteristics significantly different from those of publicly traded options. For RSUs, stock-based compensation cost is based on the fair value of the Company’s common stock at the grant date. All of the Company’s stock-based compensation is accounted for as an equity instrument. See Note 10 in the Company’s Annual Report on Form 10-K for fiscal 2019 filed on August 28, 2019 for further information regarding the 2016 Equity Incentive Plan and the Amended and Restated 2006 ESPP.
The following table summarizes the stock-based compensation expense for the three and six months ended November 30, 2019 and 2018 (in thousands):
As of November 30, 2019 and 2018, there were no stock-based compensation expenses capitalized as part of inventory.
During the three months ended November 30, 2019 and 2018, the Company recorded stock-based compensation expense related to stock options and RSUs of $163,000 and $166,000, respectively. During the six months ended November 30, 2019 and 2018, the Company recorded stock-based compensation expense related to stock options and RSUs of $313,000 and $339,000, respectively.
As of November 30, 2019, the total compensation expense related to unvested stock-based awards under the Company’s 2016 Equity Incentive Plan, but not yet recognized, was approximately $1,405,000, which is net of estimated forfeitures of $4,000. This expense will be amortized on a straight-line basis over a weighted average period of approximately 3.0 years.
During the three months ended November 30, 2019 and 2018, the Company recorded stock-based compensation expense related to the ESPP of $42,000 and $58,000, respectively. During the six months ended November 30, 2019 and 2018, the Company recorded stock-based compensation expense related to the ESPP of $91,000 and $141,000, respectively.
As of November 30, 2019, the total compensation expense related to purchase rights under the ESPP but not yet recognized was approximately $117,000. This expense will be amortized on a straight-line basis over a weighted average period of approximately 0.9 years.
Valuation Assumptions
Valuation and Amortization Method. The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a single option award approach. The fair value under the single option approach is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.
Expected Term. The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on historical experience, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as evidenced by changes to the terms of its stock-based awards.
Volatility. Volatility is a measure of the amounts by which a financial variable such as stock price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company uses the historical volatility for the past four or five years, which matches the expected term of most of the option grants, to estimate expected volatility. Volatility for each of the ESPP’s four time periods of six months, twelve months, eighteen months, and twenty-four months is calculated separately and included in the overall stock-based compensation expense recorded.
Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield in effect at the time of option grant on U.S. Treasury zero-coupon issues with a remaining term equivalent to the expected term of the stock awards including the ESPP.
Fair Value. The fair value of the Company’s stock options granted to employees for the three and six months ended November 30, 2019 and 2018 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model:
The fair values of the ESPP purchase rights granted for the three and six months ended November 30, 2019 were estimated using the following weighted-average assumptions:
During the three and six months ended November 30, 2019, ESPP purchase rights of 38,000 were granted. During the three and six months ended November 30, 2018, ESPP purchase rights of 327,000 were granted. Total ESPP shares issued during the three and six months ended November 30, 2019 and 2018 were 71,000 and 64,000 shares, respectively. As of November 30, 2019, there were 299,000 ESPP shares available for issuance.
The following tables summarize the Company’s stock option and RSU transactions during three and six months ended November 30, 2019 (in thousands):
The following table summarizes the stock option transactions during the three and six months ended November 30, 2019 (in thousands, except per share data):
The options outstanding and exercisable at November 30, 2019 were in the following exercise price ranges (in thousands, except per share data):
The total intrinsic value of options exercised during the three and six months ended November 30, 2019 was $50,000 and $67,000, respectively. The total intrinsic value of options exercised during the three and six months ended November 30, 2018 was $23,000 and $162,000, respectively. The weighted average remaining contractual life of the options exercisable and expected to be exercisable at November 30, 2019 was 3.93 years.
There were no RSUs granted to employees during the three and six months ended November 30, 2019 and 2018. During the three and six months ended November 30, 2019, 3,000 and 7,000 RSUs became fully vested, respectively. During the three and six months ended November 30, 2018, 4,000 and 9,000 RSUs became fully vested, respectively. As of November 30, 2019, 16,000 RSUs were unvested which had an intrinsic value of $31,000. As of November 30, 2018, 38,000 RSUs were unvested which had an intrinsic value of $72,000.
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2. RECENT ACCOUNTING PRONOUNCEMENTS |
6 Months Ended |
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Nov. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
2. RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS
Accounting Standards Adopted
Financial Instruments In January 2016, the FASB issued an accounting standard update related to the recognition and measurement of financial assets and financial liabilities. This standard changes accounting for equity investments and financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, this standard clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The Company adopted this new standard in fiscal year 2020. The adoption of this standard did not have a significant impact on the Company’s consolidated financial statements.
Leases In February 2016, the FASB issued ASC Update No. 2016-02, Leases (FASB ASC Topic 842, Leases). The Company adopted the standard as of June 1, 2019, using the modified retrospective approach and the transition method provided by ASC Update No. 2018-11, Leases (Topic 842): Targeted Improvements. Under this method, the Company applied the new leasing rules on the date of adoption and recognized the cumulative effect of initially applying the standard as an adjustment to its opening balance sheet, rather than at the earliest comparative period presented in the financial statements. Prior periods presented are in accordance with the previous lease guidance under FASB ASC Topic 840, Leases.
In addition, the Company applied the package of practical expedients permitted under FASB ASC Topic 842 transition guidance to its entire lease portfolio at June 1, 2019. As a result, the Company was not required to reassess (i) whether any expired or existing contracts are or contain leases, (ii) the classification of any expired or existing leases and (iii) the treatment of initial direct costs for any existing leases. Furthermore, the Company elected not to separate lease and non-lease components for the majority of its leases. Instead, for all applicable classes of underlying assets, the Company accounted for each separate lease component and the non-lease components associated with that lease component as a single lease component.
As a result of adopting FASB ASC Topic 842, Leases on June 1, 2019, the Company recognized right-of-use assets of $2.7 million and corresponding liabilities of $2.8 million for its existing operating lease portfolio on its unaudited condensed consolidated balance sheet. Operating lease right-of-use assets are presented within Operating lease right-of-use assets and corresponding liabilities are presented within Operating lease liabilities, short-term and Operating lease liabilities, long-term on the Company’s unaudited condensed consolidated balance sheet. There was no material impact to the Company’s unaudited condensed consolidated statements of operations or unaudited condensed consolidated statements of cash flows. Please refer to Note “11. LEASES” for information regarding the Company’s lease portfolio as of November 30, 2019 as accounted for under FASB ASC Topic 842, Leases.
Accounting Standards Not Yet Adopted
Financial Instruments In June 2016, the FASB issued an accounting standard update (“ASU”) that requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. Due to a subsequent ASU in November 2019, the accounting standard will be effective for the Company beginning in the first quarter of fiscal 2024 on a modified retrospective basis, and early adoption in fiscal 2020 is permitted. The Company does not expect a material impact of this accounting standard on its consolidated financial statements.
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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Nov. 30, 2019 |
Nov. 30, 2018 |
Nov. 30, 2019 |
Nov. 30, 2018 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 251 | $ (629) | $ (162) | $ (2,144) |
Other comprehensive income (loss), net of tax: | ||||
Net change in cumulative translation adjustments | (5) | (34) | (20) | (49) |
Total comprehensive income (loss) | 246 | (663) | (182) | (2,193) |
Less: Comprehensive income attributable to the noncontrolling interest | 0 | 1 | (1) | 2 |
Comprehensive income (loss), attributable to Aehr Test Systems common shareholders | $ 246 | $ (664) | $ (181) | $ (2,195) |
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